Hasbro Inc. reportedly made an offer to buy beleaguered rival
Hasbro approached El Segundo-based Mattel recently with a takeover offer but terms of the proposal were not available, the Wall Street Journal reported Friday, citing unidentified sources familiar with the matter.
Representatives for Hasbro and Mattel declined comment on the report, saying they don't respond to speculation.
Hasbro, based in Pawtucket, R.I., makes toys products such as Transformers, G.I. Joe figures, My Little Pony, Nerf and Play-Doh, as well as games such as Monopoly, Scrabble and Twister. It also has rights to valuable entertainment franchises such as "Star Wars."
Mattel's brands include the iconic Barbie doll, Hot Wheels and Matchbox cars, Fisher-Price toys and American Girl dolls.
Mattel has struggled with slumping sales despite hiring a new chief executive early this year, Margo Georgiadis, a former Google executive.
Mattel in late October reported a 14% drop in its third-quarter sales, excluding the effect of currency fluctuations, and suspended its quarterly dividend. It blamed some of the decline on the recent bankruptcy filing of retailer Toys R Us Inc.
That prompted S&P Global Ratings to lower its ratings on Mattel's corporate debt, and led one analyst to say that Mattel might be better off as a takeover target.
"We believe its brands and manufacturing footprint could be worth more than $10 billion in their current state," analyst Gerrick Johnson of BMO Capital Markets said in a note to clients. "Thus, the company could have value to a financial, industry or entertainment conglomerate buyer."
Mattel's market value is $5 billion after the stock plunged 47% so far this year. The stock jumped 5% Friday to close at $14.62 a share.
Hasbro has a total market value of $11.4 billion, and its stock is up nearly 18% this year. Hasbro closed at $91.45 a share, up 3%, on Friday.
A similar rumor that Hasbro and Mattel were holding merger talks appeared in media reports in early 2016, and such speculation repeatedly has surfaced and then faded in the two decades since Hasbro resisted a formal $5.2-billion purchase bid from Mattel.
Hasbro contended at the time that a deal might be blocked by federal regulators on antitrust grounds, and Mattel abandoned its offer in early 1996.